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March 2017 Investor Presentation – Range Resources Corp

Range Resources Corp · Mar 1, 2017 · 61 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. March 2017 Investor Presentation – Range Resources Corp – slide 1
    March 2017
  2. March 2017 Investor Presentation – Range Resources Corp – slide 2
    Range Today Market Snapshot NYSE Symbol: RRC Market Cap (a): 7.7B Net Debt (b): 3.8B Enterprise Value: 11.5B Overview 2016 Year-End Proved Reserves of 12.1 Tcfe Net Surface Acreage(c) 2016 Production Per Day of 1,542 Mmcfe SW…
  3. March 2017 Investor Presentation – Range Resources Corp – slide 3
    Range Strategy Growth of Reserves and Production on a Per Share Debt Adjusted Basis Southern Marcellus Stacked pay opportunities include the Marcellus, Utica and Upper Devonian. Expand Margins Through Cost Improvements, Capital…
  4. March 2017 Investor Presentation – Range Resources Corp – slide 4
    Range Resources Timeline Build and High Grade the Inventory 2012 - 2016 2008 - 2012 Sold Permian properties in 2004 - 2008 southeast New Mexico and Sold West Texas Texas for 275 million 2000 - 2004 properties for 182 million…
  5. March 2017 Investor Presentation – Range Resources Corp – slide 5
    Capital Efficient Growth Continues After two consecutive years of capital spending reductions, 2017 capital sets Range up well for 2017, 2018 and beyond 1,400 2,500 2,300 1,200 2,100 D&C Spending in Millions 1,000 1,900…
  6. March 2017 Investor Presentation – Range Resources Corp – slide 6
    2017 Capital Budget 2017 Capital Budget of 1.15B 2017 Capital Budget by Area Seismic, 2% Pipelines, Facilities Other, 1% and Other, 2% Leasehold, 4% North Louisiana, 34% Marcellus, 65% D&C, 93% Marcellus activity…
  7. March 2017 Investor Presentation – Range Resources Corp – slide 7
    Investment Summary High Quality Large, core acreage positions in the Marcellus and North Louisiana Acreage Position Low-risk projects with high rates of return at current prices Improving differentials across all commodities…
  8. March 2017 Investor Presentation – Range Resources Corp – slide 8
    High Quality Acreage Position - Appalachia Assets 1.5 million net effective acres (a) in SW PA leads to decades of drilling inventory Gas In Place (GIP) analysis shows the greatest potential is in Southwest Pennsylvania Low risk…
  9. March 2017 Investor Presentation – Range Resources Corp – slide 9
    High Quality Acreage Position Southwest Appalachia PA Longer laterals and existing pads in 2017 provide low-risk efficiency gains OH Increased optionality due to quality of acreage position, gathering system, WV Over 200…
  10. March 2017 Investor Presentation – Range Resources Corp – slide 10
    High Quality Acreage Position North Louisiana 220,000(a) net acres of stacked pay potential in North Louisiana Currently focused on Upper Red with optionality for additional targets Lowered well costs in Terryville to 7.7 million…
  11. March 2017 Investor Presentation – Range Resources Corp – slide 11
    High Quality Acreage Position North Louisiana Recent well results support that the Lower Cotton Valley (LCV) gets thicker and higher pressured as you move south from the Terryville field Recent results also support gas in place of…
  12. March 2017 Investor Presentation – Range Resources Corp – slide 12
    Diversified Marketing Strategy Appalachian Production Has Ability to Reach Multiple Markets Currently selling natural gas in the Gulf Coast, Midwest, Southeast and Northeast markets Ability to export ethane and propane internationally…
  13. March 2017 Investor Presentation – Range Resources Corp – slide 13
    Natural Gas Marketing Appalachian Takeaway Capacity First-mover advantage allowed Range to secure capacity on low-cost expansion projects out of Appalachia Total Appalachian Takeaway Capacity Gross Mmcf/d 2,000,000…
  14. March 2017 Investor Presentation – Range Resources Corp – slide 14
    Innovative NGL Marketing Agreements Enhance Pricing Mariner East ethane sent to INEOS for export in Europe Mariner East propane can be sold internationally or into premium NE winter markets Mariner West ethane sent to Nova Chemical…
  15. March 2017 Investor Presentation – Range Resources Corp – slide 15
    Near-Term Price Enhancements Natural Gas Differential(a) NGL as a % of WTI Condensate Differential - 30% - (0.10) 28%- (5.00)- (3.00) (0.20) 30% (6.00) (0.30) 25% 26% (6.00) (0.30) (9.13) (0.45) (9.00) (0.40) 20% 22% (0.52)…
  16. March 2017 Investor Presentation – Range Resources Corp – slide 16
    Cost Improvements Remain a Focus Driving Down Operating Costs Corporate margins improving as cash costs 0.40 have declined substantially since 2011 0.35 54% Lower debt per mcfe of production from growth 0.30 Decline 0.25 at or…
  17. March 2017 Investor Presentation – Range Resources Corp – slide 17
    Margin Expansion Drives Strong Unhedged Recycle Ratio Corporate Margin Improvement Expected Margins set to expand due to improved unit costs and realized pricing 45% 40% Unhedged Cash Margin Unhedged recycle ratio of 2.8x…
  18. March 2017 Investor Presentation – Range Resources Corp – slide 18
    Existing Marcellus Pads Improve Capital Efficiency Expansive inventory of over 200 pads in Appalachia 124 pads with 5 or fewer wells, 59 pads with 6-9 wells and new pads in progress Pads accommodate 20 wells with the flexibility…
  19. March 2017 Investor Presentation – Range Resources Corp – slide 19
    Strong, Simple Balance Sheet 4 billion credit facility from a 29 member bank group (3B borrowing base, 2B committed) Strong Capital Structure(a) Liquidity of 850 million at the end of 2016 (millio ns) 3Q16 4Q16 Bank Debt 937 882 No…
  20. March 2017 Investor Presentation – Range Resources Corp – slide 20
    Long-Term Value Creation High-quality, large-scale acreage position containing repeatable projects with high rates of return Low cost structure with ability to continue driving costs lower Margin improvements expected to drive…
  21. March 2017 Investor Presentation – Range Resources Corp – slide 21
    Appendix
  22. March 2017 Investor Presentation – Range Resources Corp – slide 22
    Cost & Efficiency Improvements SW Pennsylvania Average Lateral Length Well Cost/Lateral Length 2,500 9,000 8,000 2,000 7,000 6,000 1,500 5,000 4,000 1,000 3,000 2,000 500 1,000 - - 2012 2013 2014 2015 2016 2017E 2012 2013 2014 2015…
  23. March 2017 Investor Presentation – Range Resources Corp – slide 23
    SW PA Wet Area Marcellus 2017 Well Economics Southwestern PA (Wet Gas case) 225,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.95 Bcfe Gas Price Return EUR 24.6 Bcfe Strip - 56% (67 Mbbls condensate, 2,025 Mbbls NGLs & 12.0 Bcf gas)…
  24. March 2017 Investor Presentation – Range Resources Corp – slide 24
    SW PA - Wet Area 2017 Turn in Line Forecast 3,000 2,500 Normalized McfE/Day per 1,000 ft. 2,000 1,500 1,000 500 2016 well count reduced by 40% 0 0 100 200 300 400 500 600 700 800 900 1000 Days On 2016…
  25. March 2017 Investor Presentation – Range Resources Corp – slide 25
    SW PA Wet Marcellus Horizontal Length (TIL) Average Number of Stages 9,000 45 8,000 40 7,000 35 30 Stages 6,000 Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016 2017 2015 2016 2017 EUR per 1,000 ft. EUR…
  26. March 2017 Investor Presentation – Range Resources Corp – slide 26
    SW PA Super-Rich Area Marcellus 2017 Well Economics Southwestern PA (Wet Gas case) 110,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.40 Bcfe Gas Price Return EUR 20.4 Bcfe Strip - 51% (289 Mbbls condensate, 1,562 Mbbls NGLs & 9.3 Bcf…
  27. March 2017 Investor Presentation – Range Resources Corp – slide 27
    SW PA Super-Rich Area 2017 Turn in Line Forecast 3,500 3,000 2,500 Normalized McfE/Day per 1,000 ft. 2,000 1,500 1,000 500 0 0 100 200 300 400 500 600 700 800 900 1000 Days On 2016 Actual…
  28. March 2017 Investor Presentation – Range Resources Corp – slide 28
    SW PA Super-Rich Marcellus Horizontal Length (TIL) Average Number of Stages 9,000 45 40 8,000 35 7,000 30 Stages 6,000 Feet 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016 2017 2015 2016 2017 EUR per 1,000…
  29. March 2017 Investor Presentation – Range Resources Corp – slide 29
    SW PA Dry Area Marcellus 2017 Well Economics Southwestern PA (Dry Gas case) 180,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.52 Bcf Gas Price Return EUR 22.3 Bcf Strip - 104% Drill and Complete Capital 6.1 MM Savings From (690 K…
  30. March 2017 Investor Presentation – Range Resources Corp – slide 30
    SW PA - Dry Area 2017 Turn in Line Forecast 3,500 3,000 2,500 Normalized Mcf/Day per 1,000 ft. 2,000 1,500 1,000 500 Designed Facility Constraints 0 0 100 200 300 400 500 600 700 800 900 1000 Days On…
  31. March 2017 Investor Presentation – Range Resources Corp – slide 31
    SW PA Dry Marcellus Horizontal Length (TIL) Average Number of Stages 10,000 50 9,000 45 8,000 40 35 7,000 Stages 30 Feet 6,000 25 5,000 20 4,000 15 3,000 10 2,000 5 2015 2016 2017 2015 2016 2017 EUR per…
  32. March 2017 Investor Presentation – Range Resources Corp – slide 32
    Normalized Production Results of Marcellus Tighter Spacing Projects conducted in the Wet and Super Rich areas of the Marcellus 3,000 Tighter spaced wells turned to sales in 2009 and 2010 Average lateral length of these wells is…
  33. March 2017 Investor Presentation – Range Resources Corp – slide 33
    Targeting/Downspacing Test Results Encouraging 3500 Optimized targeting shows a 53% increase in cumulative production 3000 after 1,000 days Normalized well costs were 850M 2500 less for optimized versus original No detrimental…
  34. March 2017 Investor Presentation – Range Resources Corp – slide 34
    Return to Existing Pads Southwest Wet 100,000 Additional 5 wells Drilled Wells - 2015 10,000 Wellhead Gas (MCFD) Future Locations 1,000 100 10 Drilled Wells - 2010 1 Oct-12 Mar-13 Sep-13 Mar-14 Sep-14 Feb-15…
  35. March 2017 Investor Presentation – Range Resources Corp – slide 35
    Return to Existing Pads Southwest Dry 100,000 Drilled Wells - 2015 10,000 Additional 3 wells Wellhead Gas (MCFD) 1,000 100 Future Locations 10 Drilled Wells - 2014 1 Mar-14 Aug-14 Feb-15 Aug-15 Jan-16 Jul-16…
  36. March 2017 Investor Presentation – Range Resources Corp – slide 36
    Utica/Point Pleasant Continued improvement in well performance for the 1st, 2nd and 3rd wells due to higher sand concentration and improved targeting Ranges third well appears to be one of the best dry gas Utica wells in the…
  37. March 2017 Investor Presentation – Range Resources Corp – slide 37
    Utica Wells Wellhead Pressure vs. Cumulative Production 30 Mmcfd 10,000 25 Mmcfd 13,200 ft. TVD* 20 Mmcfd 8,000 13,400 ft. TVD* Wellhead Pressure (psi) 18 Mmcfd 11,850 ft. TVD* 6,000 12 Mmcfd 9,206 ft. TVD* 4,000…
  38. March 2017 Investor Presentation – Range Resources Corp – slide 38
    North Louisiana Upper Red 2017 Well Economics North Louisiana Upper Red 220,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 2.30 Bcfe Gas Price Return EUR 17.5 Bcfe Strip - 105% (149 Mbbls condensate, 552 Mbbls NGLs & 13.3 Bcf gas)…
  39. March 2017 Investor Presentation – Range Resources Corp – slide 39
    Upper Red - Average Production by Year Time Zero 4500 4000 3500 3000 MCFED / 1,000' LL 2500 2000 1500 1000 500 0 1 51 101 151 201 251 301 351 Days RRC Terryville Upper Red TC Upper Red 2015-2016 Actual…
  40. March 2017 Investor Presentation – Range Resources Corp – slide 40
    North Louisiana Lower Red 2017 Well Economics North Louisiana Lower Red 220,000 Net Acres NYMEX Rate of EUR / 1,000 ft. 1.58 Bcfe Gas Price Return EUR 11.8 Bcfe Strip - 40% (119 Mbbls condensate, 378 Mbbls NGLs & 8.9 Bcf gas) Drill…
  41. March 2017 Investor Presentation – Range Resources Corp – slide 41
    Lower Red Average Production by Year Time Zero 4000 3500 3000 2500 MCFED / 1,000' LL 2000 1500 1000 500 0 1 51 101 151 201 251 301 351 401 451 501 551 601 651 701 Days RRC Terryville Lower Red 2017…
  42. March 2017 Investor Presentation – Range Resources Corp – slide 42
    2016 Reserves and Resource Potential Summary Proved reserves of 12.1 Tcfe as of year Track Record of Reserve Growth end 2016 14 12 Proved reserves increased 11% y/y Total Proved Reserves in Tcfe excluding acquisitions and…
  43. March 2017 Investor Presentation – Range Resources Corp – slide 43
    Track Record of Impressive Reserve Replacement at Low Cost 3-Year 5-Year Reserve Replacement 2012 2013 2014 2015 2016 Average (3) Average (3) All sources excluding PUD removals(1) 680% 745% 793% 436% 563% 585% 509% All sources (2)…
  44. March 2017 Investor Presentation – Range Resources Corp – slide 44
    Gas in Place (GIP) Marcellus Shale GIP is a function of pressure, temperature, thermal maturity, porosity, hydrocarbon saturation and net thickness Two core areas have been developed in the Marcellus Condensate and NGLs are…
  45. March 2017 Investor Presentation – Range Resources Corp – slide 45
    Gas in Place (GIP) Utica/Point Pleasant Bold, outlined portion represents the area of the highest pressure gradients in the Point Pleasant Note: Townships where Range holds 2,000+ acres (as of January 2017) and estimated as…
  46. March 2017 Investor Presentation – Range Resources Corp – slide 46
    Gas in Place (GIP) Upper Devonian The greatest GIP in the Upper Devonian is found in SW PA A significant portion of the GIP in the Upper Devonian is located in the wet gas window Note: Townships where Range holds 2,000+ acres…
  47. March 2017 Investor Presentation – Range Resources Corp – slide 47
    Announced Appalachian Basin Takeaway Projects 1 of 2 Capacity Fully Approved or Northeast PA Operator Main Line Market Start-up* Bcf/d Committed with FERC 2015 Niagara Expansion Kinder Morgan TGP Canada Q4'15 0.2 Y Y Northern Access…
  48. March 2017 Investor Presentation – Range Resources Corp – slide 48
    Announced Appalachian Basin Takeaway Projects 2 of 2 Capacity Fully Approved or Southwest Operator Main Line Market Start-up* Bcf/d Committed with FERC Midwest/Canada/ Rover Ph1 ETP Q2'17 1.9 Y Y 2017 Gulf Coast Rayne/Leach Xpress…
  49. March 2017 Investor Presentation – Range Resources Corp – slide 49
    Mariner East: Opening New Lanes Only producer with current capacity on Mariner East Historic first shipments of ethane from U.S. to Europe Optionality of selling propane internationally or in local markets Improved ethane and…
  50. March 2017 Investor Presentation – Range Resources Corp – slide 50
    Range Bonds Continue to Trade Well Source: Bloomberg as of 2/21/2017 52
  51. March 2017 Investor Presentation – Range Resources Corp – slide 51
    Natural Gas Hedging Status Volumes Average Floor Average Time Period Hedged Price Ceiling Price (Mmbtu/day) (/Mmbtu) (/Mmbtu) 1Q17 Swaps 819,167 3.17 3.17 2Q17 Swaps 818,764 3.16 3.16 3Q17 Swaps 841,196 3.19 3.19 Gas Swaps 4Q17…
  52. March 2017 Investor Presentation – Range Resources Corp – slide 52
    Oil Hedging Status Volumes Average Floor Average Time Period Hedged Price Ceiling Price (bbl/day) (/bbl) (/bbl) 1Q17 Swaps 8,833 55.26 55.26 2Q17 Swaps 8,824 55.23 55.23 Oil Swaps 3Q17 Swaps 8,761 56.38 56.38 4Q17 Swaps 8,761…
  53. March 2017 Investor Presentation – Range Resources Corp – slide 53
    Natural Gas Liquids Hedging Status Volumes Hedged Hedged Price Time Period (bbls/day) (/gal) 1Q17 Swaps 3,000 0.27 2Q17 Swaps 3,000 0.27 Ethane (C2) 3Q17 Swaps 3,000 0.27 4Q17 Swaps 3,000 0.27 1Q17 Swaps 14,215 0.56 2Q17…
  54. March 2017 Investor Presentation – Range Resources Corp – slide 54
    Significant Natural Gas Demand Growth Projected LONG-TERM US NATURAL GAS DEMAND ROADMAP (BCF/D) Cumulative 2017 2018 2019 2020 2017-2020 LNG Exports Sabine Pass 1.2 0.7 1.9 Freeport 0.5 1.0 1.5 Cove Point 0.8 0.8 Cameron 1.2 0.6…
  55. March 2017 Investor Presentation – Range Resources Corp – slide 55
    U.S. Natural Gas Exports to Mexico Expected to Increase Source: Raymond James Energy Research Report Dated 12/19/2016 59
  56. March 2017 Investor Presentation – Range Resources Corp – slide 56
    Non-Appalachian Gas Basins Growth by Area 6.0% 4.0% 2.0% Year over Year % Growth 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% Source: Bentek, EIA as of January 2017 60
  57. March 2017 Investor Presentation – Range Resources Corp – slide 57
    Appalachian Pipeline Flow Data by Region (Mcf/d) Production plateauing NE PA production limited by infrastructure DUC inventory declining Source: RS Energy Group, raw data from Ventyx Velocity Suite and Bloomberg, as of February…
  58. March 2017 Investor Presentation – Range Resources Corp – slide 58
    Total U.S. Natural Gas Production Growth by Area 12.0% 10.0% 8.0% 6.0% Year over Year % Growth 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% Source: Bentek, EIA as of January 2017 62
  59. March 2017 Investor Presentation – Range Resources Corp – slide 59
    10 20 30 40 60 50 0 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Source: RigData as of February 2017 Apr-14 from the 2014 peak Jul-14 Oct-14 Marcellus rig count down 54% Jan-15…
  60. March 2017 Investor Presentation – Range Resources Corp – slide 60
    What Does the Futures Strip Price Indicate for Regional Basis Dawn 2016 +0.30 2020 -0.01 Algonquin 2016 +2.24 MichCon Leidy 2020 +0.99 Chicago CG 2016 +0.19 2016 -1.15 2016 +0.15 2020 -0.07 2020 -0.70 Transco Z6 (NY) 2020…
  61. March 2017 Investor Presentation – Range Resources Corp – slide 61
    Contact Information Range Resources Corporation 100 Throckmorton St., Suite 1200 Fort Worth, Texas 76102 Laith Sando, Vice President Investor Relations (817) 869-4267 lsandorangeresources.com David Amend, Investor Relations…

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